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Market check: Stocks rally from lows, tech rebounds

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Yahoo Finance's Jared Blikre examines market recoveries and volatility levels in the day's final trading hour, in addition to looking at tech stocks, the software and banking sectors, and bitcoin prices.

Video Transcript

EMILY MCCORMICK: Welcome back. As we continue to track the recovery across US equity markets this afternoon, we're bringing in Yahoo Finance's Jared Blikre for the breakdown. Jared, tech stocks have seen a pretty extraordinary rebound during today's session. The NASDAQ now up well over 2%. Tell us more about what you're seeing across the tech names.

JARED BLIKRE: That's right. It's not just tech, it's the mega caps overall. And we're seeing a broad-based comeback in those stocks, and especially those growth names, which have been beaten down as well. This is the NASDAQ. You can see it's up almost 3%. It started out the day down over 3%, in fact, almost 3 and 1/2%. This is a year-to-date look at the price action. And here's today's candle. And you can see a huge green candle there encroaching in on yesterday's territory. Very similar situation in the S&P 500.

I want to note, we had a very similar situation exactly one month ago on January 24. That was this candle here. Now we opened lower, we probed some depth here, and then we recovered, turning green into the close. Not as much, but I've been tracking these reversal days. They don't always necessarily mark the bottom, a major bottom, but usually, you get a few days of respite and some higher prices following that.

I do want to point out that in the midst of the pandemic sell-off-- these are weekly bars, so you're not going to see the green here-- we also had a huge reversal day. It was good for a two, three-day bounce, but then we probed these lower lows. And in fact, that was the fastest bear market in history. So bottom line, if we do end up with a European land war, probably going to be much, much lower prices in the indexes and in stocks.

However, for the time being, we do have a tradable bounce. We saw the MOEX-- that's the Russian stock index-- rise 11%. That's after being down more than 30%. It rose 11% when Biden was speaking. That's because it looks like the SWIFT option is off the table for now, and maybe, just maybe, we have a month to kind of sort things out.

Also want to take a look at the VIX because we had a guest on earlier today, Chris Vecchio, and he was saying in order to mark an interim top here or bottom in the market, he wanted to see the VIX above 35. In fact, we got VIX of 36, 37 on the open. He also wants to see the volatility of the VIX hit at least 150. It actually hit 145. So we do have the makings of a potential interim bottom here.

I just want to go over the sector information or the sector leaders. As I said, it's all about the mega caps. Tech, communication services, which houses Alphabet and Facebook, and then consumer discretionary, which is the XLY sector. And here, you can see it. Amazon up 4%, Tesla up 4%. So is Microsoft. Nvidia up over 5%. So impressive, impressive comeback moves here.

RACHELLE AKUFFO: I mean, when you see a reversal like this, give us that deeper dive into the market moves. What were you keeping an eye on?

JARED BLIKRE: Well, I'm looking at some of the sectors in industry groups. And we can go through those one by one. What's impressing me here is software. Software has been beaten down since November of last year. A lot of these names are cybersecurity names. Those are especially seeing a big boost today, but you can see ServiceNow up nearly 10%, Adobe up 8%, Oracle up 3%. Crowdstrike, cybersecurity company, up 13%. So really just seeing a lot of these names come back.

But it's not all about the green today. We're also seeing some redness in some of the banking names. And that's because the yield curve-- yields are crashing right now. So we're seeing JPMorgan off 3%, Bank of America down 3%. So really, the value and cyclical trade should be flagging today, and that's what we're seeing.

BRAD SMITH: And Jared, while we have you, can we talk cryptocurrency for a hot second here? Because when we think about Bitcoin, Ethereum, Bitcoin particularly, as it's been heralded as digital gold, how has that compared in this moment in comparison to actual gold and other commodities?

JARED BLIKRE: Bitcoin is trading more in line with equities than it is with gold, so really not that Armageddon hedge that we have with gold. And let's remember, gold kind of serves two different purposes. It can be an inflation hedge and an Armageddon hedge. We're seeing a huge rush into the US dollar today. That could potentially be weighing on commodities and also cryptocurrencies because they move generally inversely to each other.

But let me just go to a five-day chart of Bitcoin. And we can see this huge falloff yesterday. That was concurrent with equities. Now gold might be surging today, but really, Bitcoin was not following that move earlier today when gold had lifted off. It was more in line with equities. So really not seeing that close correlation with gold right now, more with stocks.

BRAD SMITH: All right, Yahoo Finance's own Jared Blikre. Jared, thanks so much for the breakdown there.